As populations increase and economies grow, the demand for energy generally grows. Changes in energy demand are also affected by movements to and from energy intensive activities, changes to fuel input choices and changes to alternative, efficient technical practices. With increasing public, media and policy discussion on energy, it is important to measure and understand the changes in energy consumption and the factors contributing to this.

This article examines South Australia's energy consumption over the period 1989-90 to 2006-07 using data from the Australian Bureau of Agricultural and Resource Economics (ABARE) and the Australian Bureau of Statistics (ABS). The article looks at how energy consumption has changed in South Australia and Australia with reference to population and economic growth, and to the structure of the economy. It shows that slower population growth and increased activity in industries with low energy needs have contributed to a slower increase in energy consumption in South Australia than in other states.

TOTAL ENERGY CONSUMPTION

Total energy consumption (TEC) as defined by ABARE (2008) is a measure of energy usage. It is a net concept, being the difference between the gross amount of energy provided by the use of fuels and the amount of energy contained in manufactured, or derived fuels. In order to avoid double counting, the energy used to produce energy products (consumed in other sectors) does not count toward the estimate of total energy consumed in the sector where the products are produced.

Relative to 1989-90 levels, TEC in South Australia did not increase as rapidly as, nor to the extent of, that for the nation. South Australia's TEC increased by 5.1% between 1989-90 and 2006-07, while TEC for Australia increased by 46.2%. South Australia had the lowest TEC growth rate of all the states and territories over this period. As a result, South Australia's share of the national TEC has decreased from 7.7% in 1989-90 to 5.5% in 2006-07.

TOTAL ENERGY CONSUMPTION

Between 1989-90 and 2006-07, the states and territories with the largest percentage increases in TEC were the Northern Territory (108.2% increase), Western Australia (93.7%) and Queensland (89.2%). As shown in the next section of this article, these states and territories experienced much higher population and economic growth between 1989-90 and 2006-07 compared to South Australia.

TOTAL ENERGY CONSUMPTION, States and Territories

1989-90

2006-07

Change

PJ

PJ

%

NSW(a)

1 230.4

1 529.0

24.3

Vic

1 099.8

1 463.4

33.1

Qld

691.8

1 308.9

89.2

SA

301.9

317.2

5.1

WA

473.0

916.0

93.7

Tas

96.6

125.9

30.3

NT

52.5

109.3

108.2

Australia

3 945.9

5 769.8

46.2

(a) Includes ACT

Source: ABARE Energy Update 2008, Tables C1 to C8

POPULATION AND ECONOMIC GROWTH

Change in population, measured by Estimated Resident Population (ERP) is a factor that may affect TEC. South Australia's small increase in TEC could in part be attributed to South Australia having the smallest ERP increase (10.6%) of the mainland states over the period June 1990 to June 2007. The national increase in ERP was 23.1% over this period, with Queensland (44.2%) and Western Australia (30.6%) showing the greatest increases of all the states and territories.

Change in the level of economic activity, measured by Gross Domestic Product (GDP) for Australia and Gross State Product (GSP) for the States and Territories, is another factor affecting TEC. Between 1989-90 and 2006-07, Australia's GDP in chain volume terms increased by 71.9%, while South Australia's chain volume GSP increased by 46.8%, Queensland's by 109.0 % and Western Australia's by 106.7%.

When the average annual changes in TEC and GSP or GDP between 1990-91 and 2006-07 are compared, the South Australian measures of 0.3% and 2.3% respectively are the smallest of all the states and territories. South Australia's average annual change in population was also below the national average, and the smallest of all states except Tasmania. By comparison, Western Australia, with the highest average annual increase in energy demand (TEC) of 4.0% for the period, had greater than national average changes in population (1.6%) and GSP (4.4%).

AVERAGE ANNUAL CHANGE IN TEC, ERP AND GSP(a) - 1990-91 to 2006-07

TEC

ERP(b)

GSP

%

%

%

NSW(c)

1.3

1.0

2.8

Vic

1.7

1.0

2.9

Qld

3.8

2.2

4.4

SA

0.3

0.6

2.3

WA

4.0

1.6

4.4

Tas

1.6

0.4

2.4

NT

4.5

1.6

3.3

Australia

2.3

1.2

(d)3.2

(a) Average annual change calculated as the mean of the annual changes

(b) For ERP, the average annual change refers to the period from June 1991 to June 2007.

Another indicator related to energy consumption is energy intensity, which is the amount of energy input required to produce a unit of output. Gross State Product and Gross Domestic Product provide measures of economic output, and TEC provides a measure of energy input, so that energy intensity can be measured as the ratio of TEC to GSP or GDP.

Energy intensity in South Australia and Australia steadily declined from 1989-90 to 2006-07, with South Australia showing the greatest decrease (28.4%) of all the states and territories. Negative changes mean that the rate of growth of the economy is greater than the rate of growth of the total energy consumption, implying that energy is being used more efficiently and/or economic activity is shifting away from energy intensive activities (ABARE 2008). The Northern Territory was the only state or territory with an increase in energy intensity over this period, indicating energy consumption was growing faster than GSP.

ENERGY INTENSITY, GSP AND GDP

ENERGY CONSUMPTION BY INDUSTRY

One of the factors affecting energy intensity is the profile of industries that make up the economy, or the structure of the economy. If there is a bias towards industries that require high energy inputs to produce a unit of output (i.e. energy intensive industries) then energy intensity will be high. The most energy intensive ANZSIC divisions in Australia are Mining and Manufacturing, where iron and steel manufacturing, alumina production and primary aluminium production are particularly energy intensive industries.

The Mining industry in South Australia showed a 7.2% decrease in TEC between 1989-90 and 2006-07, while nationally the industry increased its consumption by 185.6%. The national increase was driven by Queensland, Western Australia and the Northern Territory which all had considerable expansion of their mining industries between 1989-90 and 2006-07 (ABARE 2007, 2008).

The TEC of South Australia's Manufacturing industry decreased by 2.6% between 1989-90 and 2006-07 while nationally it increased by 28.3%. The Metal products manufacturing sub-division (which includes the high energy intensive iron and steel and non-ferrous metals manufacturing) had a 21.1% decrease in TEC in South Australia during this period, while nationally it increased 23.1% (ABARE 2008).

Low energy intensive Commercial industries and the Residential sector increased their combined share of South Australia's TEC from 12.6% in 1989-90 to 17.2% in 2006-07. Nationally these industries were responsible for 12.0% of TEC in both 1989-90 and 2006-07.

These changes in the industry mix of South Australia relative to Australia may have contributed to the state's sharper decline in energy intensity.

CHANGE IN TOTAL ENERGY CONSUMPTION - 1989-90 to 2006-07

ENERGY CONSUMPTION BY FUEL TYPE

Changing to a fuel for which the available technology provides a more efficient means of delivering energy can reduce energy consumption.

South Australia's consumption of electricity increased 53% between 1989-90 and 2006-07. The state's production of thermal electricity only increased by 37.2% though, implying a net purchase of electricity from other states. In fact, for every year between 1989-90 and 2006-07, South Australia's consumption of electricity exceeded its production (ABARE 2008).

Of the main fossil fuels consumed in South Australia, the greatest increase between 1989-90 and 2006-07 occurred with natural gas (4.9%). The consumption of coal and coke in South Australia during this period fell 11.8%, largely due to the energy intensive Manufacturing division where the consumption of coal fell by 20.3% (or 7.3 PJ) (ABARE 2008). The remainder of the coal consumed in South Australia was used for electricity generation in power stations, but the change in coal consumption for this industry was a very small increase (1.2%, or 0.5PJ). Nationally, coal used to fire electricity power stations increased in usage by 60.7% over this period (ABARE 2008).

CHANGE IN GROSS CONSUMPTION, Selected fuel types - 1989-90 to 2006-07

SUMMARY

Smaller population and economic growth in South Australia and a shift away from energy intensive industries has contributed to a lower than national average increase in energy consumption and better than national average improvement in energy intensity. South Australia's 5.1% increase in total energy consumption between 1989-90 and 2006-07 was the lowest of the states and territories. South Australia also showed the largest decrease in energy intensity during this period.